Sunday, September 26, 2010

Anti Trust Law Against A.P.S.R.T.C

A big bank comes up with an offer that, if anybody purchases anything with their credit card, then they would get 2% cash back on the purchases. Other small banks cannot give the same offer, because, it would incur too much loss for them. With that, everyone takes the credit card of the big bank. Once, the small companies go out of business, the big bank cancels all the offers.

If there are multiple players in the market competing with each other, then the consumer gets the best deal. If a big player kills all the small players, and there is only one provider for the service, then the consumer never gets the good deal.

Anti trust law makes sure that, a big player does not kill the small players and becomes monopoly. Practically, Anti trust law is not required if there many players of equal capacity. It is required, if there is only one big player or all the big players are united.

In Hyderabad, everyday many people travel between Mehdipatnam and Gachibowli Financial District (where lot of IT companies are there). It is one of the few routes, where the no.of passengers is huge. Travelling by bus at any time is a pain in that route. During peak time, it is not even possible to enter the bus. That's why, most of the IT people take share autos to travel in this route. Few months back, suddenly, I observed the reduction in the no.of share autos in this route. I was wondering what happened suddenly. The reason was, APSRTC increased no.of buses significantly, and people can sit and travel during the peak time. I thought it was the greatest thing done by the APSRTC in years.

After a month or two, APSRTC reduced the no.of buses back to their normal. But, once in a while, I see many buses in that route, but, not everytime. After that, those who are travelling in that route by using public transport (bus or share auto) are waiting minimum half an hour to one hour.

When the APSRTC increased the no.of buses significantly, people started using buses instead of share autos. So, the business of share autos went down in that route, and probably, they shifted to different routes. Once the no.of share autos went down in that route, APSRTC reduced the no.of buses. For an auto person, who does not have any other income, he would prefer consistent income every day, rather than with ups and downs. If they are getting consistent income from the route they are traveling, they will not change their route to less consistent one. So, after the reduction of the no.of buses in that route, the share autos did not increase. Because of that, those whoever is traveling by that route are waiting minimum half an hour.

APSRTC is a very big player and it is a monopoly in public transport (in Andhra Pradesh). The share autos are very small players. When APSRTC increased the no.of buses, the share autos had to move to different route. Once they moved to different route, APSRTC reduced the no.of buses to their normal. It essentially killed the small players without increasing the service.

If this has been in US, APSRTC can be prosecuted and severely fined under Anti Trust Law. But, unfortunately, India does not have strong laws in this. If we have that law and really apply on everyone who violates it, then except P.V.Narasimha Rao, Vajpayee and Manmohan Singh, all the prime ministers would be in jail forever.

Workaround for those who travel in that route

If you are going from Mehdipatnam to IIIT/Wipro/Infosys, take the share auto that goes to Kondapur, and get down at Gachibowli or Kothaguda. From there, you can take another share auto to IIIT/Wipro/Infosys. If you are returning from Wipro/Infosys/DLF, take share auto to Kothaguda, and from there, you can take to Mehdipatnam. Never get down at IIIT. If you get down at IIIT, you will be stuck, since, it is difficult to get share autos to Lingampally/Mehdipatnam/Kothaguda from IIIT. If you get down at IIIT, and want to go immediately, then the only option would be going to Infosys and from there taking share auto to Kothaguda.

This option will cost more. But, we don't have an option, since we elected the party which follows socialistic economics.

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